SL Capital Looking For Smaller U.S. Funds

UK-based fund-of-funds manager SL Capital Partners intends to commit $50 million to $75 million per year in the United States over the next couple of years, said Jamie Ebersole, senior investment director in the firm’s Boston office. That yearly commitment amount will likely be divvied up among three to six general partners.

The firm currently has $100 million left to invest from its North American Strategic Partners 2008 fund, a $250 million vehicle. Although the firm would not comment on where it now stands in its fundraising cycle, it has a history of raising new funds of funds every 18 months.

SL Capital currently sees funds of less than $1 billion as an attractive market segment and will look at vehicles as small as $150 million. The mix between re-ups and new relationships will be 50/50, said Ebersole. The firm’s focus is mainly mid-market buyout funds, but it will also do some secondary buyout deals, as well as committing to mezzanine, distressed debt and energy funds.

Emerging managers are definitely on SL Capital’s radar screen. So far pledges have gone to spin-out teams, but non-spin-outs would be considered, as long as the team has a track record and a history of working well together. One spin-out that snagged a $10 million pledge is mid-market shop Excellere Partners, which spun out from KRG Capital.

Other GPs include Advent International, Apax Partners, Charlesbank Capital Partners, CVC Capital Partners, Hellman & Friedman, The Jordan Company, Sun Capital Partners and TowerBrook Capital Partners.

Besides running funds of funds, the firm also handles separate accounts, such as its €514 million ($654 million) mandate from the California Public Employees’ Retirement System to invest in European funds of less than €2.5 billion.

SL Capital Partners spun out of Standard Life Group in 2007 but is still 60 percent owned by the group. The firm has 13 investment professionals in Edinburgh, Scotland, and four in the Boston office.